The Wealthy Are Hoarding $10B of Bitcoin in Bunkers • Hacker News Board

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#61

Post by [deleted] » Wed, May 09, 2018, 1:59 PM UTC

kajumix wrote: post #41

simias wrote: post #17

>the global currency of the future, that they need to buy some, and that he’s the man to safeguard it. Looks like in the future people hoard currency instead of spending and investing it then. That ought to be interesting. It also demonstrates the costs associated with non-reversible transactions, these vaults aren't storing gold ingots or priceless artifacts, just private keys. Banks around the world don't need to w…

>if you do hold the keys you better be absolutely paranoid with them because there's no plan B if they get compromised or destroyed One could do multi-signature wallets with Bitcoin. So, for example, there could be three keys: one with you, one with your significant other, and one with a third party custodian, and it'd take, say, 2 out of 3 signatures to spend out of the wallet. It doesn't change the bearer nature of…

[deleted]

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#62

Post by rabbitonrails » Wed, May 09, 2018, 2:00 PM UTC

frockington wrote: post #50

chiefalchemist wrote: post #42

Earlier quoted context omitted.

> "Looks like in the future people hoard currency instead of spending and investing it then. That ought to be interesting." That sounds like the current to me. Too much is locked up (in too few hands) instead of doing what currency should do. That is, reduce the friction of trade (i.e., goods, skills, etc.) Currency is a lubricant. It's no surprise things are drying up.

What group is hoarding currency? With interest rates and the global economy roaring low we've had an explosion of investing in the past few years. I don't know of one group of people that would benefit from holding cash in the present environment

All first world governments?

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#63

Post by harlanji » Wed, May 09, 2018, 2:00 PM UTC

I heard an interesting analysis of long term crypros, by Jeff Berwick IIRC, that BTC will become the holding coin and transactions will happen on alts. My intuition agrees, tho I hold no coins so am impartial. He is sharp generally and claims to nail predictions, have not verified, so I lean toward agreeing but would obv research before I buy into any strategy. Another video I saw examined the amount of BTC in terms of some unit of energy relative to current global usage. I don’t wish I bought some in 2010/11 but I’d sure be sitting pretty if I had less regard for the polar bears!

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#64

Post by laglad » Wed, May 09, 2018, 2:01 PM UTC

pavlov wrote: post #22

According to its proponents, Bitcoin is digital gold. (Interestingly it’s not an “electronic currency” anymore even though that was the original title of the 2008 whitepaper. I suppose Lightning Network or something is supposed to fix that with new transaction layers backed by the Bitcoin gold.) One aspect of gold’s historical value is that it’s traditionally recognized even in societies in collapse. I’ve never under…

Your points are valid. IMO the key tradeoff b/w gold (analog) and bitcoin (digital) is extra resiliency vs usability.

If there were a systemic collapse breaking governments, knocking off power and telecom networks etc, gold would be immediately most valuable. But more quickly than fiat, bitcoin would be useful.

Power and telecom systems are more resilient to systemic collapse (& have more bouncebackability) than a functioning government and its currency. Some semblance of critical systems would come online whether put up by government, armies, warlords, cooperatives etc (See Somalia as an example). When those systems are online, bitcoin can be sent and received.

In short: in terms of usability: Fiat > Bitcoin > Gold in terms of resilience: Gold > Bitcoin > Fiat

Am I missing anything here?

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#65

Post by mkirklions » Wed, May 09, 2018, 2:01 PM UTC

Cthulhu_ wrote: post #31

simias wrote: post #17

>the global currency of the future, that they need to buy some, and that he’s the man to safeguard it. Looks like in the future people hoard currency instead of spending and investing it then. That ought to be interesting. It also demonstrates the costs associated with non-reversible transactions, these vaults aren't storing gold ingots or priceless artifacts, just private keys. Banks around the world don't need to w…

That's because - and everyone but the uninformed or idealists know this - it's an investment product. It's simply not suitable as a currency, because one, inflation / instability, and two, it can only do what, a dozen transactions a second, if that? That's not nearly enough to become a viable currency.

Speak for yourself. I use bitcoin all the time for payments.

Peer to peer using coinbase(email) for free and instant to friends.

Shift card for free and instant at merchants.

Bitcoin is beyond blockchain, companies have built products to trade BTC instantly, free, using the infrastructure already existing. The transaction time 'problem' doesnt really exist if you are into crypto, you know how to use it.

And I dont trust USD like I trust BTC. Historically Fiat currencies are awful.

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#66

Post by emodendroket » Wed, May 09, 2018, 2:01 PM UTC

TomMarius wrote: post #58

Balero wrote: post #49

Earlier quoted context omitted.

Bitcoin has no inflation, there are only a given number of total bitcoins in existence, which many (myself included) would argue makes it a poor currency.

I know, that's why I'm asking what does the commenter mean with inflation in their comment.

Probably meant deflation.

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#67

Post by conanbatt » Wed, May 09, 2018, 2:02 PM UTC

chiefalchemist wrote: post #42

simias wrote: post #17

>the global currency of the future, that they need to buy some, and that he’s the man to safeguard it. Looks like in the future people hoard currency instead of spending and investing it then. That ought to be interesting. It also demonstrates the costs associated with non-reversible transactions, these vaults aren't storing gold ingots or priceless artifacts, just private keys. Banks around the world don't need to w…

> "Looks like in the future people hoard currency instead of spending and investing it then. That ought to be interesting." That sounds like the current to me. Too much is locked up (in too few hands) instead of doing what currency should do. That is, reduce the friction of trade (i.e., goods, skills, etc.) Currency is a lubricant. It's no surprise things are drying up.

A poor village in africa has starvation. They do not produce enough food to feed themeslves properly. So they are given an aid of 10,000 U$S. So they turn to their own farmers and say "Behold the currency, we were dry of it before and we were dry of food because of it. Now take the money and transform it into abundance and plenty!"

The farmers put the bills in the ground, right next to the seeds, but it does not make the farm more plentiful. The villagers learnt the hard lesson: that plenty does not follow money.

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#68

Post by wilde » Wed, May 09, 2018, 2:03 PM UTC

frockington wrote: post #50

chiefalchemist wrote: post #42

Earlier quoted context omitted.

> "Looks like in the future people hoard currency instead of spending and investing it then. That ought to be interesting." That sounds like the current to me. Too much is locked up (in too few hands) instead of doing what currency should do. That is, reduce the friction of trade (i.e., goods, skills, etc.) Currency is a lubricant. It's no surprise things are drying up.

What group is hoarding currency? With interest rates and the global economy roaring low we've had an explosion of investing in the past few years. I don't know of one group of people that would benefit from holding cash in the present environment

People have been investing in stocks, but entrepreneurship is declining. [1] What I think this person is getting at is that the increased economic activity doesn’t seem to be correlated with opportunity for social mobility, regardless of whether the value is stored in securities or currency.

[1] https://fivethirtyeight.com/features/the-slow-death-of-ameri...

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#69

Post by emodendroket » Wed, May 09, 2018, 2:03 PM UTC

frockington wrote: post #51

kfrzcode wrote: post #23

Earlier quoted context omitted.

> in the future people hoard currency People hoard(ed) currency in the past and present as well

Who is hoarding currency on a notable scale? Why would they at the very least not invest in short-term bonds/mmfs

Mostly drug traffickers and other people involved in illegal businesses. Hey, maybe Bitcoin isn't that different from other currencies after all.

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#70

Post by apo » Wed, May 09, 2018, 2:03 PM UTC

If you want to understand just how difficult managing cryptographic material is for the technically illiterate, look no further than Xapo.

It's not "Bitcoin" that Xapo stores, but private keys. In underground bunkers. This no doubt gives some people a warm fuzzy.

But Bitcoin's history is littered with the wreckage of companies that took it on themselves to store private keys on behalf of others.

I don't know when Xapo will fail, but if history is any guide it's just a matter of time. The weakest link in their system is the people involved.

Consider this tortured statement:

If Xapo’s deep cold storage vaults were hacked, Xapo would cover the loss from its own reserve but the hack could be bigger than the reserve which would cause a net loss to our customers.

https://blog.xapo.com/what-would-happen-if-xapo-got-hacked/

In other words, a Xapo depositor would eat the loss in the event of a successful attack on the cold storage system.

The funny thing about all of this is that private key management isn't difficult when you know how. Given the vast sums of money being stored, you might think that certain big fish would want to take the time to do it right.